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Trading Under Own Brand Name

HS Negi (Senior Executive- F&A) (590 Points)

22 January 2009

Dear All

I would like to ask all of you that If one have the registration of a dealer. if he buy some items, Can he sell it with his own brand name with his own packing & relableing.

If yes please provide me the authority on URGENT BASIS

Regards

Harendra Singh Negi

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5 Replies

Pavan Jain S (Chartered Accountant) (1575 Points)
Replied 22 January 2009

Activity of repacking and relabeling the products amounts in deemed manufacture in case of goods specified in III schedule. Also. if the section or chapter notes of I schedule regard these activities as amounting to manufacture in relation to certain goods, the same will be deemed to be manufacture and exigible to duty.

You need to check the relevant schedules

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Rajesh Kumar (Advocate- Tax) (7806 Points)
Replied 22 January 2009

Pawan is very right- you have to examine the nature of goods, its classification. Then refer to third schedule and relevant chapter and section notes. If it does not fall within the definition of deemed manufacture, a trader can do it. Otherwise, excise duty is payable and you need a manufacturing license.

HS Negi (Senior Executive- F&A) (590 Points)
Replied 23 January 2009

Sir,

According to me The items under 3rd schdule belongs to MRP cluase. If we buy some traded items and stock transfer it to other manufacturing plant and we sell these items affixing MRP sticker and paid duty fully as per MRP condition i.e. availng the abatement. from manufacturing unit.

In this scenrio is it ok ?

Regards

Harendra Singh Negi

Pavan Jain S (Chartered Accountant) (1575 Points)
Replied 23 January 2009

The schedule has to be referred to in order to examine the eligibility to duty. If the goods in question are specified in the III schedule, then the activity of relabelling and affixing MRP is liable to duty.

Once the goods are liable to duty, they must be valued either u/s 4 or u/s 4A. If the said goods are notified u/s 4A and MRP is required to be affixed to it as per SWM Rules, then method followed by you is correct

Arun Kumar Singh (Consultant) (28 Points)
Replied 24 January 2009

According to me, you have to examine the nature of goods and classification. if you have to buy some items and you want to packing and relabeling. Packing is a process and processing is amount to manufacture. Then you have to need manufacturing license and liable to pay excise duty.